An Open Internet in Europe?: EU Advances SM Telecoms Regulation

BY CCIA Staff
August 8, 2013

In case you went on holiday and missed it: holidays have been cancelled this Summer. Well, if you work on telecomms policy issues in Brussels that is.

In February this year the European Commission fired the starting gun on work on a single market for telecommunications. In what is record time for a large organisation such as the European Commission it produced a first draft for internal consultation in early July. With the deadline for comments on 26th July, this leaves little time for, er, holidays before a planned adoption by the College of Commissioners on 10th September. Bureaucracy moving at Internet speed? May well be.

The proposed Regulation deals with broad range of issues: roaming tariffs, radio spectrum, authorisations, wholesale pricing and net neutrality. While the tone of the pro-market package (so far) is welcome, it is this last item that we at the CCIA are following closely, so important is it for the innovation system in the Internet age. BEREC’s work, showing that some 36% (or more than 200 million) of European mobile subscribers can’t use Skype (and other services), illustrates why open Internet rules are necessary. They would safeguard the interests of European consumers, and Internet content, application and service providers across the Union, as well as provide clarity to Internet Service Providers about what constitutes reasonable traffic management.

However, the right legislative text is needed, not just the right intentions. Article 20 of the proposed Regulation tries to set out these ‘rules of the road’. It needs more work.

First, there needs to be an overarching principle of non-discrimination in the text. The political intent must be clear. The risk of discrimination by ISPs against companies delivering content and services over the Internet is real. It damages competition. It damages consumers. It could damage our public realm as more and more services move online.

The French electronic communications regulator, ARCEP, has developed model language based on a broad principle of non- discrimination that is a valuable point of reference.

This should not preclude operators from experimenting with tiered pricing where users pay for the data they consume or pay for different speeds, nor would it impede innovative managed services. The non-discrimination principle aims to preclude network operators unfairly controlling what, in content terms, users consume or produce on the open Internet and who provides services to whom.

Secondly, any legislation should be introduced under the assumption it will be enforced. To do this there needs to be a clear distinction between ‘Internet access’ and ‘managed services’ in the text. Currently there isn’t.

The term “managed service” refers to the way a network operator provides services comprising content, services and/or applications through electronic means marketed by the network operator over and above, and separately from, internet access. These are value-added offers such as IPTV or Video-on-Demand where users enjoy a guaranteed quality of delivery within a closed network wholly operated and controlled end-to-end by the telecommunications provider.

In contrast, ‘Internet access’ refers to the global public network providing consumers with the ability to send and receive data by using the Internet Protocol from all of the interconnected public and private networks around the world that make up the Internet.

Clearly distinguishing the two will allow services to be distinguished, thus making it possible to enforce the rules. It will give ISPs flexibility and the assurance that they can develop new services, and protect the open Internet.

Thirdly, reasonable network management must comply with the principles of relevance, proportionality, efficiency, transparency and non-discrimination. Article 20.2 of the draft has identified reasonable grounds for legitimate traffic management. It needs to go further by stating that traffic management practices must only be deemed reasonable if they comply with general criteria of relevance, proportionally, efficiency, transparency and non- discrimination, as well as existing laws including inter alia privacy and data protection.

Finally, national regulatory authorities need to be required and empowered to play a proactive role monitoring the open Internet. Without regulators proactively supervising the market there will continue to be behaviour that is harmful to consumer and to innovators.

Additionally, content and application providers need to have standing to complain about discrimination by network operators; currently they can’t. Finally, NRAs must develop efficient and timely processes for investigating such complaints, so that remedies can be made quickly to minimize damage to fast moving and innovative businesses that rely on their users’ Internet access for their revenue.

As with any legislation, clarity is key. The rules on the open Internet should be unambiguosly pro-openness. The current draft prohibits blocking and throttling and in the next breath states that “….providers of content, applications and services and providers of electronic communications to the public shall be free to agree with each other on the treatment of the related volumes or on the transmission of traffic with a defined quality of service”. Let’s clear this up, once and for all.

In the end, people will only buy high bandwidth broadband because they want to access something on the internet. So blocking access to certain services damages consumers, damages service companies, but damages telecoms companies as well.

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